Measure for Measure . . . TUPE and redundancy

We must not make a scarecrow of the law,Setting it up to fear the birds of prey,And let it keep one shape, till custom make itTheir perch and not their terror.
(Wm Shakespeare, Measure for Measure, Act II, Sc I)

The TUPE regulations are too dynamic for the comfort of those advising their employer (or their clients), with caselaw often changing between taking on a service contract and losing it again. This is very anxiety-provoking for most HR practitioners, since ‘getting it wrong’ can mean their employer is taking on liabilities they otherwise need not, or, worse still, on the losing end of several employment tribunal claims.

This is particularly so when a TUPE transfer involves potential headcount changes and redundancies.

The legislation on redundancy and TUPE intertwine and interleave, and it can be tricky working out who needs to be consulted about what, in what format, over what period of time, and by whom. So let’s have a go.

Consultation

TUPE consultation

Redundancy consultation

Statutory obligation to inform or consult with appropriate representatives

Always, no threshold of employee numbers

20 plus redundancies at one establishment within 90 days

Appropriate representatives

Reps from recognised trade union; or employee reps appointed or elected by affected employees for another purpose; or specially elected/appointed employee reps

Reps from recognised trade union; or employee reps appointed or elected by affected employees for another purpose; or specially elected/appointed employee reps

Statutory Timescales

No defined statutory minimum period of consultation Information about transfer given to reps long enough before the transfer to enable consultation (with a view to seeking agreement) to take place on the ‘measures’ to be taken by either employer

Less than 20 redundancies – no specified timescale20+ redundancies at least 30 days before first dismissal takes effect100 +plus redundancies; 90 days Consultation ‘in good time’

Description of employees covered by the consultation

Anyone who may be affected by the transfer (not just those transferring)

Anyone at risk, and those who may be affected by measures taken in connection with those dismissals

Inform, in writing: reasons; numbers and descriptions of employees proposed to be redundant, and total number of employees of each description at the establishment; proposed method of selection, and proposed method and timing of dismissals; proposed redundancy payments; number of agency workers working for employer, where in the business, and doing what

Duty to consult

With a view to seeking agreement to intended measures, considering representations, and stating reasons if proposals rejected

With a view to reaching agreement, about ways of avoiding the dismissals, reducing the numbers, and mitigating the consequences

On whom duty is placed

Transferor to consult; transferee to provide ‘measures’ statement

Employer

Penalties

Up to 13 weeks’ pay (statutory maximum not applying)

Protective award up to 90 days’ pay

The Government made a call for evidence on ways to improve TUPE, which closed on 31 January 2012. No draft legislation has been published.

TUPE caselaw is developing all the time. Where redundancies are to take place in a TUPE scenario, then both sets of regulations and caselaw have to be considered and applied.

Many of the toughest issues around TUPE, economic technical or organisational dismissals (ETOs) and collective redundancies (or finding alternatives to them) are most effectively resolved by having a good consultation process.

Having clear organisational and commercial objectives does not mean that the way of achieving these is set in stone, and there is a real difference between the aftermath of a well constructed and well consulted process, and the fall-out from a rushed compliance exercise.

If we accept this as a fact and work within it, then it becomes obvious that the way to deal with the ‘grey’ areas is to have a conversation – in other words, to consult. If you do this in a TUPE context you will quickly discover that some people:

don’t want to TUPE through and would be happy to be made redundant (whether or not a genuine redundancy situation exists)

are not willing or able to change location/work base if that is what is needed

are not willing or able to learn new working methods and techniques

and by way of comparison some people

are keen to expand their skill base

are keen to change location

have unused skills in their current role that would be useful in a new structure

will do just about anything to keep a particular job

I have often sat down with HR teams and Directors who have said “X will never do this, Y will never agree to that”. Sometimes they are right, but equally they can be wrong. Flexibility can be as much influenced by circumstances as by personality. We don’t know what people are keen to do until we ask them, and lay out the options for them. Good consultation can have useful individual results, as well as improving the atmosphere at a challenging time.

For regular free teleseminars on TUPE, redundancy and more check our events page. We are running a new seminar on how to handle the two processes simultaneously.

We founded Irenicon in 1980 to help employers make employment law work for them. We were always a mixed disciplinary practice – something quite revolutionary at the time.
Over the years we have worked with some wonderful organisations, pushing the boundaries of how employment law can really be made to work without restricting the flow of the organisation.